Time to Diversify
Looks like coronavirus is here to stay, at least for the foreseeable future. The first case in the U.S. is confirmed, and the CDC is cautioning everyone that it’s going to get worse before it gets better.
What does this mean for us? Ask any of our clients who are manufacturing in China. We Americans have felt insulated, but not any more.
Putting aside the obvious health ramifications, what are leaders who do business in China, South Korea, Italy – the list keeps growing by the day – and other parts of the world where the virus is taking hold supposed to do?
It shouldn’t take a potential pandemic to emphasize the obvious, which is that you should never put all of your eggs in one basket.
It seems to me that if the tariff issue weren’t reason enough, now is a great time to be looking at other geographies to diversify your production and supply chain. You’d never construct a leadership team that would fall apart if one person left, and the same approach applies to your manufacturing.
Look at Apple. They’re taking a hit because their iPhones are assembled in China. Now their whole operation there is on hold. Okay, most of you reading this column aren’t Apple, but the same risks apply.
As I’m writing this column Thursday afternoon (yesterday) the Dow closed off almost 1,200 points for the day, at 25,767. It was over 29,000 a week ago. Looking into my crystal ball, if I had to guess, today is not the day for a rally, heading into the weekend, with uncertainty as to when the coronavirus is going to peak and exactly how much havoc will be left in its wake. So, I guess what I’m saying is I’m not doubling down on the market reaction to this health scare just yet. It’s probably a good idea to let the uncertainty of whatever the news will bring over the weekend ride and see if the markets stabilize when the true extent of the spread of the virus (or not) can be better understood.
The news is always going to be filled with crises. It’s what you make of them that determines how successful your business will be. Planning can put you in the driver’s seat, rather than catch-up mode when you have no other alternative but to react. If you’re not sure where to begin, our Marcum professionals are here to help.
Stay healthy everyone!